Airbus Says Energy Costs Are Leading Small Suppliers to Idle Plants

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(Bloomberg) — Airbus SE Chief Executive Officer Guillaume Faury said high energy prices are weighing hard on suppliers to its jetliner programs and that some smaller firms are having to idle production.

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While the worst of a supplier crunch triggered by shortages of labor and raw materials may be over, the high cost of power has become a pressing issue for players lower down the chain, Faury said Wednesday in comments at the UK Aviation Club. It’s another challenge for the manufacturer at a time when Airbus has been seeking to crank up output. 

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“We see another thing coming, which is the consequences of energy prices skyrocketing leading to some suppliers trying to adapt, sometimes stop producing, waiting for the situation to normalize,” he said. “That’s very low in the supply chain, but it’s probably something new.”

Faury acknowledged that Airbus’s supplier base wasn’t as prepared as it might have been as the group sought to bounce back from the Covid-19 pandemic. At the same time, he said, a goal of producing 75 A320-series planes a month by 2025 remains “likely to happen.” 

When asked how the UK’s current economic and market turmoil, which has hit the value of the pound, is affecting Airbus, Faury said the company is well hedged and so is not exposed. The CEO said the jetmaker is happy with the support it’s receiving in the UK and that wing production for all of its models will remain focused there. 

While the Toulouse, France-based group had viewed Brexit as a risk to its British connections, the situation now is positive, with the UK valued for its “innovative, fast ecosystem,” he said.